Former QBE head O'Halloran to become Steadfast Group chairman
EMERGING insurance firm Steadfast Group said the former QBE chief Frank O'Halloran was a "logical choice" to take charge as chairman as it prepared for a stockmarket listing next May.
EMERGING insurance firm Steadfast Group said the former QBE chief Frank O'Halloran was a "logical choice" to take charge as chairman as it prepared for a stockmarket listing next May.Mr O'Halloran, who was planning to join the QBE board next year, surprised investors when late on Friday he detailed plans to head up the Steadfast board.The appointment of Mr O'Halloran comes less than two months after he retired from QBE following a 12-year stint as its chief executive.In taking on the role at Steadfast, QBE's board has offered to waive a non-compete clause in his contract which would have prevented Mr O'Halloran from acting for an insurance company or related business for three years from his retirement.The executive chairman of Steadfast, Robert Kelly, said plans for the initial public offer were well under way and Mr O'Halloran was the logical choice for the insurance broker network."We do $760 million worth of business with QBE annually, we've had a long-standing relationship with them for many years. We've worked very closely with [Frank] over that time," Mr Kelly said yesterday.Steadfast is aiming to float its business in May next year. JPMorgan and Macquarie Capital have been selected as joint lead managers to the planned float.The Steadfast model sees insurance brokers band together to negotiate wholesale insurance rates with the major insurers. This is then sold to the customers of insurance brokers. Steadfast is planning to take ownership stakes in more than 100 insurance brokers. This would see it emerge as a rival to the listed insurance broker network Austbrokers Holdings.Still, the appointment of Mr O'Halloran to a business that seeks to drive down premiums from players such as QBE raised questions among investors. Mr O'Halloran is well known in the insurance broking community and has intimate knowledge of QBE's pricing models.There are more than 400 Steadfast brokers' offices nationally, with sales of $4.1 billion and annual revenues of about $700 million. Analysts calculate Steadfast would be valued at about $440 million based on its future earnings growth.Mr O'Halloran was travelling overseas yesterday and was unavailable for comment.The chairman of QBE, Belinda Hutchinson, said Mr O'Halloran "is passionate about the insurance industry, and feels that his expertise would add a great deal at Steadfast Group with its plans to list on the ASX". However, given QBE underwrites 17 per cent of Steadfast's insurance, the QBE board and Mr O'Halloran "agreed that he will not return to the QBE board in 2013 as originally envisaged".
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free